number 32 • Summer 2017

Authors

Jonathan P. Caulkins

articles

If the powerful push for state-level legalization of marijuana continues, let alone if the drug is ultimately legalized nationally, the challenge of taxing marijuana will have to be confronted. The experience of the states that have led the legalization charge so far offers only cautionary lessons. As further states and the Trump administration weigh their options, it is worth thinking carefully about the proper purpose and structure of a tax on the drug.

The revolution in the legal status of marijuana has been rapid and dramatic, in large part because of the effectiveness of the core argument of the pro-legalization lobby: that marijuana does not harm its users, or society more broadly. But the drug's misleading reputation for harmlessness is based on the fact that marijuana use is highly concentrated among a growing minority who use it daily or near-daily. Simply put, most marijuana users are healthy, but most marijuana use is not.

For four decades, advocates of drug legalization have promoted their cause as a simple solution to the violence, disease, and social ills that surround the war on drugs. And from state-level referenda to permit marijuana use to policy proposals that would "experiment" with drug legalization, this case has recently appeared to gain steam. But before we consider any of these measures, we must first educate ourselves about the likely consequences of legalization — particularly its effect on drug prices, use rates, and criminal activity. The evidence suggests that those consequences could be disastrous, and, even in the case of "experimental" or "temporary" legalization, permanent.